Lee Kuan Yew: The Man and His Ideas

by Han Fook Kwang

  “Let me put in a positive way what we want:

  “First, a striving acquisitive community. You cannot have people just striving for a nebulous ideal. They must have that desire to improve, whether it is the scooter, the mini car, the flat, the fridge, the washing machine, the television set, better shoes, better clothes or better homes. You must equate rewards to performance because no two persons want to be the same. They want equal chances in order that they can show how one is better than the other. This is a fact of life, which even the communists have had to admit. The constitution of Romania, a socialist country, says that each man shall be rewarded in accordance with what he contributes, not ‘to each in accordance with his needs’.

  “Next, we want forward-looking good management. The old family business is one of the problems in Singapore. It is not so with European or foreign enterprise. One of the reasons for our floating an industrial development bank [Development Bank of Singapore, now DBS Bank] is because of the sluggishness with which people change habits. They are accustomed to buying and selling. And business is kept in the family. They have done this for hundreds of years. And the idea of sinking money into an anonymous corporation run by professionals over whom they have no direct personal control is foreign to them. They are loathe to make this change. So we have to accelerate this process. Business management is a professional’s job and we need professionals to run our business effectively.

  “And third, easy social mobility. One of the reasons contributing to Japanese and German recovery was that their … capitalists, managers, executives, engineers and their … workers all suffered defeat and they were fired with a singleness of purpose: to put their country back on its feet. That made the miracle of recovery. If the Japanese worker and the German worker had felt that his job in life was to defeat his employer and deny him that profit because he was being kept one down by the employer’s son going to a public school and acquiring all those graces in life which were denied the worker’s son, then he was bound to be sluggish and inefficient.”

  (Speech at an annual dinner of the Singapore Employers Federation, May 10, 1968)

  What’s wrong with being a bus driver?

  How to get more to join the Singapore Bus Service crew? This may be dismissed by some as a petty problem, but not to Lee, who brought it to national attention.

  Managing an economy is not just about grand plans. For Lee it meant persuading, rallying, sometimes even scolding the people. His standards were high, his ability to see the big picture widely acknowledged. But his great strength as a politician was his ability to talk to people using language and illustrations they could understand. On economic development, this meant putting issues such as their jobs, pay or relationship with their bosses in terms they could relate to. No issue was too trivial or routine for him if it was symptomatic of a bigger problem or if, by bringing it out into the open, it held out wider lessons for all. In this quintessentially Lee speech, he spoke of his surprise that Singaporeans were turning down good-paying jobs as bus drivers.

  “Recently, we mounted an exercise to recruit drivers for the Singapore Bus Service. You know that we have got to have more buses to have a good bus service, and you need good drivers. So we thought that the National Serviceman who had learned how to drive a three-ton truck should be offered the opportunity. So we mounted three recruitment exercises …

  “Ten years ago, if you introduced a man into the Singapore Traction Company or into a Chinese bus company as a driver, he would have been happy to have given you his one month’s salary as commission. We circularised the posts. About 800 National Servicemen went on ROD [Run Out Date, the date their full-time National Service ends] between January and July. About 500 turned up to listen to the opportunities we were offering them. SBS produced a colour brochure, ‘The Bus Way to a Secure Future’ … You know how many applied? Seven the first batch, 34 the second batch, 20 the third. You know how many are working now? One driver and three temporary conductors training to be drivers. Remarkable! Whilst training you are paid $11.60 per day, one year, as recruits. Then $12.80. This bewildered me. I chased up the Central Manpower Base. I said, ‘What are they doing? What marvellous jobs are they holding?’ Because I got the monthly returns as to how many workers are retrenched, how many work permits issued. … in the last 18 months since the retrenchment started, 30,000 workers have been retrenched, 70 per cent women and girls. But I just took this year, January to July; of the 7,500 retrenched, 4,800 – nearly 4,900 – were women. In those same seven months, we issued 11,500 work permits of which 4,400 were for women. It does not square up.

  “What happened to these National Servicemen? They had primary six and secondary two – the highest levels. Many of them were just sitting at home! Some had gone out into the reserves in January. Forty or 50 are still unemployed. They go in at 18; they finish at 20. They only have a class 3 for driving a three-ton truck. You have got to be 21 before you take a class 4 to drive a bus. Originally, in the second batch, eight went in. They were asked – whilst practising to drive a bus and waiting to reach the age of 21 – to sell tickets. They said pai-sei [shy]. They liked their passengers behind them and did not want to face each chap to sell a ticket. This is the new generation Singaporean.”

  (National Day Rally speech, August 17, 1975; text on page 351)

  The structure Lee established to achieve those three aims he set out in 1968 had one simple objective: rewarding hard work and enterprise. For all the complicated theories which modern economics has spun over the last century or so about what governments can and should do to achieve growth, there seems none as important as this. Without a system of rewards, why would a population strive to achieve ever higher living standards?

  “First, you must have a structure in your society which makes learning and hard work rewarding. In other words, to study, to learn, to be an effective worker, either a carpenter, a welder, or a computer programmer, or whatever. That must equate to success, to rewards.

  “If you have a system where the chap who cuts corners is a man who gets rich and the man who studies hard is the chap who’s a mug, then you will fail. And that’s what’s wrong in many countries which have not succeeded … So you must, first, have that structure in place. To do that, you need order, discipline. And that’s what’s wrong with the Philippines.

  “Second, you must create conditions where capital plus knowledge can be matched with workers with the skills and at a price that makes it productive. So whether it is machines to build factories, to make tape-recorders or radios, or whether it is to run a department store, they need capital. You just don’t have a Takashimaya out of nothing. Somebody has built Takashimaya over 160 years in Japan and accumulated all the techniques of how to have high-class marketing. And they have decided we have a structure here that’s worth operating in because their skills, their knowledge, their capital plus our labour and our consumers will make it profitable. So it must be a match. And if you don’t create that, nobody will come in.

  “And many poor countries don’t have the capital. Now we have the capital. When we started we didn’t have the capital. When we started earning, we started putting money aside through CPF [Central Provident Fund] and built up the capital. Now, we have the capital to go to China, or Vietnam, or Indonesia, or India or wherever. But these countries need a lot of capital from our side. We don’t have enough to get China or India going. But America, Europe, Japan, they have the capital. And you’ve got to make it productive.”

  We don’t understand management

  Increasing the Singapore workers’ productivity was a major preoccupation of Lee’s. He knew it was the only way forward for Singapore and was determined to get everyone else to understand this, even if it meant being brutally frank, as he was in remarks made in August 1981, a classic Lee speech delivered by a tough-talking prime minister who wanted to put across a difficult concept in terms people could grasp easily.

  “My meeting with the American, German, Japanese, Singapore N
ational Employers Federation … was most instructive. The most disturbing facet of my discussion, reading their submission, was that if we had to depend on Singapore entrepreneurs we would not have today’s Singapore. It’s a damning admission for me as prime minister to tell you this. But I think you should know that.

  “… We may have been traders, but we do not understand management. Our managers do not understand productivity. Otherwise how can I get a submission from the Chinese Chamber of Commerce telling me, ‘Why should we confine CPF being managed by employers, to only big employers of 300 or more employees? We, small shopkeepers, can also handle it.’ I don’t think they have the slightest clue …

  “The Germans made this point: ‘The Singapore paradox … it is well known throughout the world that the workers of Singapore are busy and industrious. One can easily see this when looking around the Kallang area – small marine wharves build ships with the highest skill. One finds this in any area where demand for performance matches the ability to perform and the worker concerned can identify with the fate of the enterprise involved.

  “‘Touring the shopping centres, factories, office buildings, one often observes that operators or clerks are not in the least interested in the fate of the enterprise; just chatting and being non-productive. … To be successful you must instil a certain high-fidelity, feeling in something. That means a sense of loyalty, a sense of trustworthiness –high-fidelity. … Management’s problem is that they should not forget that not only the brains and the hands but also the hearts of people should be working for the company.’ That’s well put – not only brains and hands but get the workers’ hearts. … That’s exactly what the Japanese have been doing.

  “[The Japanese made this point.] On the anniversary of the company, they invited the workers to bring all their families to come and celebrate. Nobody came! The family is not interested in the future of the company. So he said, ‘Why is this? Maybe it’s the wrong format. So all right, Chinese New Year we invited them. They all came. Well, that’s progress.’ His worker gets married, he turns up for the worker’s wedding. He is interested in the future of his worker. … And he says, ‘It’s very strange, you know, I was not introduced to the father-in-law, the mother-in-law and so on. We just sat around.’ I said, ‘Well, you know, we inherited the British tradition and British bosses never attend the weddings of their workers. They were probably honoured but embarrassed and at a loss what to do.’

  “But the heart of the worker, that’s what productivity is about.”

  (Text of speech on page 355)

  Of course, it helps tremendously if, together with a structure that rewards hard work and enterprise, the people working it are by nature hard-driving and intelligent.

  “The critical factor? The quality of your people. Are they hardworking? Do they learn quickly? How well can they do the job?

  “I think the critical advantage is the people. If we were lazy and not good at mathematics, conceptualisation and science, our engineers would not have replaced the Dutch or the Germans or the Americans, and these factories would be employing expats at very heavy costs and may never have expanded so well.

  “But we were able to fill up those jobs, we were as good as the American or Dutch engineers or the Japanese engineers. Well, the Japanese don’t think so, so they keep a lot of their top jobs still Japanese.

  “But it is the quality of the population. First, have they got the capabilities to be educated to that level? Second, have you given them the facilities and have they made the effort?”

  What was required then was a rigorous and sound education system which in the early years of a country’s development must be geared to the needs of the economy.

  “I think what is universally true of most new countries is that they inherited a system of education, which very often was carried on unthinkingly by indigenous independent governments for five, ten years with very serious repercussions for their own development and resulting in unemployment.

  “You find countries like Ghana, for instance, which in West Africa has been exposed to contacts with the West for several centuries. Before the British, there were the Danes and the early slave traders. They are people who have acquired quite a degree of sophistication, the ones on the coast as distinct from the ones in the hinterland. And the British have produced among them Greek scholars, Latin scholars. The Vice-Chancellor of the University of Ghana was a Greek and Latin scholar. But they did not produce engineers, technicians who could have run the Volta High Dam for them. Or perhaps more relevant, they did not produce good scientists in agriculture, in fertilisers, in how to make their economy move from a relatively simple agricultural pastoral base into something more productive.

  “At the other end of the scale are India and Pakistan – highly developed educational sectors, universities well-endowed and prepared. They got into a position where they were producing unemployed engineers because the economic development was not keeping pace with the engineers they were producing – the net result being, their doctors migrated. As British doctors migrated to America for better jobs, Indians and Pakistanis filled British hospitals.

  “And the lesson is that everybody has got to take a hardheaded look at his own position, decide in the context of his own base, the potential that it has, what is the next step forward. And for us the most important single thing is, of course, the development of our human resources, exploiting our strategic location which makes possible certain industries.”

  (Speech to Singapore Polytechnic students in January 1972; text on page 347)

  Many little regrets, but no basic errors

  Lee looks back on 30 years of economic progress with satisfaction and a little surprise, and he has few misgivings about the way the economy has turned out.

  He told the authors that he was “surprised that we have done it so quickly in one generation, from rags to riches, in 30 years, slightly over a generation … It’s not been done, I think, by many people.”

  But, he added, “Surprised in the sense that it was an unexpected result? No, I think by ’75, ’76, when we overcame the first oil crisis … we were on course and recovering … It wasn’t a fluke. We were on course, we had a trim economy, we had people, we had people in charge in MTI [Ministry of Trade and Industry], in Finance, who knew how to manage the economy. We had workers who were able and managers who were able to adjust.

  “From then onwards, it was a matter of how fast we could go. We were already airborne, we had taken off. The economy had taken off. Had we still been on the ground waiting for the takeoff, and the oil crisis came, we may have had a more difficult time. …

  “There’re many small regrets. Mistakes here, mistakes there. You know, like trying to do shipbuilding when we didn’t have an iron and steel industry and we were buying steel plates from Japan or Korea at high cost. We could have saved ourselves the trouble.

  “Somebody should have said to us: Look, this is only if you also have iron and steel and then you’ve got cheap raw materials – cheap supplies of basic materials, not raw materials. Because if you want to build a ship, you need a lot of steel sheets. And we couldn’t go into iron and steel because we’d pollute the whole of Singapore.

  “No, this was in the late ’70s. So without iron and steel, how could we go into shipbuilding? We could have saved ourselves. We built several Freedom vessels and licensing from the Japanese, IHI, 10,000-, 12,000-tons – not worth it.

  “Many little regrets, but no basic errors.”

  No one can deny today Singapore’s economic achievements. The success has been achieved by a combination of hard work, a strong and determined leadership, enlightened economic policies, political stability and a culture which encouraged thrift and learning. And of course, Lee’s almost single-minded determination to transform Singapore’s economic base. Critics have sometimes attacked this aspect of the country’s development, that it has devoted too much to the economy at the expense of its political and cultural development. Lee is completely u
napologetic about this and is as convinced today as he was 38 years ago that for any government and people, economic development must be the number one priority.

  “Absolutely. If not that, what are you talking about? You’re talking about misery and poverty. You’re talking about Rwanda or Bangladesh, or Cambodia, or the Philippines. They’ve got democracy, according to Freedom House [a human rights group]. But have you got a civilised life to lead?

  “… People want economic development first and foremost. The leaders may talk something else. You take a poll of any people. What is it they want? The right to write an editorial as you like? They want homes, medicine, jobs, schools. No, no, no, there’s no question about it.”

  As the drama of the pro-democracy protests at Tiananmen Square unfolded, Lee was convinced that these students would meet a tragic end.

  6

  End of History? Asia’s Just Beginning